Canada’s First Cobalt has an offtake agreement with cobalt trader Stratton Metal Resources for the sale of future cobalt sulphate production from its refinery in Ontario, the TSX-V-listed company announced on Monday.
First Cobalt will have the option to sell up to 100% of its yearly production to Stratton Metals once its refinery is in production. Quantities will be determined by First Cobalt in advance of each calendar year and are subject to a minimum yearly quantity.
The ability to elect the yearly quantity sold to Stratton Metals would provide the company with time and flexibility to advance offtake and battery recycling discussions with potential original equipment manufacturer partners.
“Stratton Metals is among the most knowledgeable cobalt traders in the world, with a network of relationships in every major market,” said president and CEO Trent Mell.
“This sales arrangement is a key milestone for the company as firming up commercial arrangements supports the financing process for the refinery expansion,” he added.
The five-year offtake contract matches the expected term of a project debt facility currently being negotiated, as well as long-term arrangements for refinery feedstock. In January, First Cobalt concluded five-year cobalt hydroxide feed purchase arrangements with Glencore and IXM.
Refinery commissioning remains on schedule for October 2022.